Rocket lands near US Embassy in Baghdad's Green Zone

Tensions are high between the US and Iran. Photo / AP file

A rocket landed inside Baghdad's fortified Green Zone, which houses the sprawling United States Embassy, Iraqi security officials said, in an apparent warning shot to the US amid escalating tensions with Iran.

The rocket landed less than 1.5km from the US Embassy near Iraq's Parliament building and caused no injuries or serious damage, a security official said. But the timing of the launch has increased worries in Iraq that it will be drawn into a conflict between two of its closest allies, the US and Iran.

There was no immediate claim of responsibility, but suspicion among Iraqi officials and Western diplomats fell on one of the Shia militias that draw their strength from Iranian support. Last week, the State Department took the extraordinary step of ordering all nonessential staffers to leave the embassy and consulate in the northern Iraqi city of Irbil, citing an alleged threat from Iranian proxies in the country.

Shia militias with deep ties to Tehran have gained unprecedented political and military power over the past three years and have repeatedly used rocket launches towards American diplomatic missions to express their displeasure with US policies.

Late last year, several rockets fell harmlessly near the US Embassy in Baghdad and the US Consulate in Basra during a halting and acrimonious government formation process in which the US tried to thwart Iraqi militia members from shaping the nation's Cabinet after elections in which they gained the second most seats in Parliament.

The Trump Administration responded by closing the consulate in Basra.

Today's incident contributed to a growing sense in Iraq among politicians and diplomats that Iraq may become a staging area for a unpredictable conflict between Washington and Tehran - a prospect Iraq's leaders have repeatedly warned will destabilise Baghdad as it works to recover from a four-year war to oust Isis (Islamic State).

Iran and the US played pivotal military roles in backing Iraq's military and militia forces in the effort to defeat the militant group and have since attempted to leverage that assistance into political and economic influence.

Iraq's president and prime minister have insisted that Baghdad seeks close ties with both powers and wants to remain neutral in the rivalry that has exploded into bellicose warnings of military action since US President Donald Trump took office. He pulled out of a nuclear accord among Iran, Europe and the United States and imposed widespread economic sanctions.

Iran has responded by trying to bring Iraq closer to its orbit as a way to offset the debilitating effects of the American penalties.

Breaking: a rocket was launched 10 minutes ago possibly toward the U.S embassy in Baghdad. Launch location the Amana bridge in Baghdad. Blast was loud and us embassy warning all to take cover pic.twitter.com/od3tDab4Va

— Anne Speckhard (@AnneSpeckhard) May 19, 2019

Iraqi officials and European diplomats have warned that even a small provocation like the rocket launch could trigger a heavy-handed American response, drawing the region further into violence and instability.

US Secretary of State Mike Pompeo and national security adviser John Bolton have been explicit in their threats to Iran, saying they will hold Tehran responsible for any actions taken by their allies in Iraq, Syria, Lebanon or Yemen, where Iran sponsors a constellation of powerful militias.

Pompeo made a surprise trip to Baghdad this month to rally Iraq's leaders to the US side.

The order to partially evacuate the US Embassy and suspend visa services soon followed, angering some Iraqi lawmakers who said Washington was punishing Iraq for a political rivalry it wants no part of.

The dire American warnings have also lead ExxonMobil to begin evacuating employees from an oil field in Basra this weekend, according to AP.

A US Navy carrier group and fighter jets have been moved into the region in recent weeks in response to what the White House has said were "imminent" threats from Iran on American forces.

The Trump Administration has provided no evidence for the claim, which has been received with scepticism and mistrust from some American lawmakers and European and Iraqi allies, who suspect the US of politicising the diplomatic spat with Iran.